Feb. 7 (Bloomberg) -- A $1 billion office-and-hotel tower
being developed by Korean Air Lines Co. in downtown Los Angeles
will be the tallest building in the western U.S. upon its
completion in four years, according to the project’s architect.

The foundation of the 1,100-foot (335-meter) tower will be
poured at the end of this year, with a grand opening planned for
March 2017, said Chris Martin, chief executive officer of Los
Angeles-based architecture firm AC Martin Partners. The building
will rise higher than downtown’s 1,018-foot U.S. Bank Tower,
currently the tallest in the U.S. West. Final renderings of the
new tower are being unveiled at a press conference today.

“Downtown, along with a lot of the other commercial office
centers, has relatively high vacancy rates as a result of the
job losses stemming from the financial-market crisis,” Robert
Kleinhenz, chief economist at the Los Angeles County Economic
Development Corp., said in a telephone interview. “But by the
time this building opens it will probably be able to benefit
from a recovery.”

Downtown Los Angeles, which has undergone a decade-long
revitalization, has been helped by such developments as the
Frank Gehry-designed Walt Disney Concert Hall on Grand Avenue,
which has lured locals and tourists into the area since its 2003
opening. The Staples Center sports arena, L.A. Live
entertainment complex and new restaurants and bars also have
drawn people to the area.

Vacancies Rise

Even with the area’s resurgence, office vacancies in
downtown Los Angeles rose to 17.8 percent in the third quarter,
the latest period for which figures are available, from 15.6
percent a year earlier, according to Jones Lang LaSalle Inc. The
increase was mostly from the expiration of a Wells Fargo & Co.
lease at 444 S. Flower St., which resulted in 190,000 square
feet (17,700 square meters) coming on the market, the brokerage
said in a report.

The Korean Air building will have 73 usable floors and
feature a 100-foot-tall glass pediment and spire at the top. The
tower will house a 900-room, four-star hotel; 400,000 square
feet of office space; and 45,100 square feet of retail space,
according to AC Martin, a firm whose founder’s projects included
Los Angeles City Hall, completed in 1928 and featured in such
television shows and movies as “Dragnet,” “Adventures of
Superman” and “L.A. Confidential.”

The skyscraper will be built on the site of the Wilshire
Grand hotel, which closed in 2011 and is being demolished. The
project was scaled back from plans first announced in 2009 for
two towers -- a 60-story office tower, and a 40-story hotel.

Tenant Discussions

The new building is likely to attract financial or
technology-related companies, said Chris Martin, grandson of AC
Martin’s founder. There hasn’t been a new office building in
downtown Los Angeles in two decades, he said.

The tower’s developers “are in discussions with a handful
of possible tenants,” Martin said. “This building attracts
these two types of tenants because it is located at the
intersection of the financial district and the emerging
entertainment district” near L.A. Live and Staples Center.

Turner Construction Co., based in New York, will oversee
the project’s development, and Cushman & Wakefield will be the
leasing agent, Korean Air said in a statement today. The Seoul-based airline also owns hotels in South Korea and Hawaii.

The hotel’s lobby will be located on the 70th floor, with
restaurants on the 71st and an open-air pool on the 73rd.
Instead of a helicopter landing pad on the roof, typical of most
Los Angeles skyscrapers, the building will have a fireproof
elevator encased in 8,000 pounds (3,600 kilograms) of concrete
for emergencies, Martin said.

The project is expected to create more than 11,000
construction jobs and contribute $80 million in tax revenue
during development, according to its builders. More than 1,700
permanent local jobs and $16 million in annual local revenue
will be created by the tower, they said.

“The new Wilshire Grand is an investment that makes sense
and we are excited to continue our relationship with this great
city,” Korean Air Chairman Y.H. Cho said in today’s statement.